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Transforming Digital Targeting through Big Data Optimization

There are major forces in play that are changing the dynamics of how data gets generated, collected and used for optimizing customer interactions across all available offline and digital touch points. Digital data expansion has accelerated the “Big Data Revolution.” Ninety percent of the data that exists in the world has been created in the past two years. According to Emarketer, digital media spend is expected to grow nearly 50% by 2016. Targeted display alone will grow over 2X by 2016 and surpass search as the #1 digital media category. Data informed programmatic media buying continues to grow as a way to generate high-performance from digital media.

Another market observation is that digital audience targeting is way behind offline targeting in terms of sophistication … which is related to the next point. The value of data is not well understood in the digital space. Analytics continues to be a major gap. From my vantage point, marketers have a tremendous opportunity to generate high ROI through analytically-led digital data solutions bridging offline and online.

Digital data sourcing needs to undergo a major transformation. Currently, we see that media planners with little or no targeting experience are making data buying decisions. The value of digital data is not properly measured, and accuracy of the data is not properly validated. Current audience selection is primarily driven by off-the-shelf, generic segments that are not optimized to specific campaign objectives. Marketers are not making use of rich digital and transactional first party data to create custom audiences.

In our opinion, transformation of digital audience targeting needs to be driven by the following factors:

  1. Unbiased Approach: Analytic evaluation and validation of all available digital data using an agnostic approach is key to determining the most valuable data sources
  2. Big Data Capabilities: Internet scale, real-time big data platform is needed to process vast amounts of digital data and integrate with DSPs, ad exchanges and other digital media partners in the ecosystem
  3. Advanced Analytics Expertise: Predictive analytics and optimization will enable the mining of granular first-party data, such as response, conversion and customer value to develop custom audiences

To put this transformation into context, we should take a look at the changes that have taken place in the data ecosystem over the last 10+ years. In early 2000s, content-based buying was used as a proxy to reach desired audiences. In mid 2000s, we saw continued reliance on content as a proxy, but re-marketing provides a shift in targeting. In today’s environment, spend shifts toward third-party data, and first-party audience targeting grab client interest. In our opinion, the future state is all about using custom predictive analytics driving media targeting decisions and integrating offline and digital data sources.

To recap, the digital data landscape is changing rapidly due to innovation and the Big Data explosion. An analytically-led, unbiased approach is needed to determine the best mix of valuable digital data sources that will drive high performance for marketers. We are in the early but accelerating stages of an exciting journey and new approaches will be necessary ….first movers will have a significant advantage.

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